MSNBS must have took notes, trying to top Christian releasing today an article from Forbes, "China goes on Gold Binge, as World Wonders Why. No easy answer why the fifth largest holder of metal has increased purchases."
Article highlights and reasoning,
"the purchase of gold would be especially risky for the central bank, which is already insolvent from a balance sheet point of view. The PBOC needs income-producing assets in order to meet its obligations on the debt incurred to buy foreign exchange, so the holding of gold only complicates its funding operations. "
"there is not much demand from the country’s institutional investors for gold."
Their conclusion,
"The easy answer is that the demand is only seasonal, as Jeff Wright of Global Hunter Securities believes. The Chinese traditionally buy gold presents in the run-up to the Lunar New Year, which started a week ago."
Except there is one big problem among many with the conclusion, THE SURGE IN GOLD PURCHASES STARTED LAST JULY.
